EXHIBIT
10.35


 


AGREEMENT TO CONVERT


 


This Agreement to Convert certain Demand Notes into
Common Stock  is made as of December
       , 2003, by and between AXCESS
International, Inc., a Delaware corporation (the “AXCESS”), and VennWorks LLC, a Delaware
limited liability corporation, formerly incuVest LLC (“VennWorks”).


 


RECITALS


 


A.                                   AXCESS issued to incuVest a Demand note on
September 14, 2000 and as of November 30, 2003 has an outstanding principal
balance of $91,106.00 and unpaid interest of $68,052.27.


 


B.                                     AXCESS also issued to incuVest a Demand Note
on January 12, 2001 and as of November 30, 2003 has an outstanding principal
balance of $712,148.61 and unpaid interest of $64,260.12.


 


C.                                     AXCESS also issued to VennWorks a Demand Note
on February 14, 2002 and as of November 30, 2003 has an outstanding principal
balance of $326,978.15 and unpaid interest of $38,927.60.


 


AGREEMENT


 


NOW THEREFORE, in consideration of the foregoing and the mutual
covenants contained herein, the parties hereto agree as follows:


 


1.                                       Conversion.  AXCESS and VennWorks agree to convert
$1,301,472.75 owed to VennWorks by AXCESS for the above demand notes and unpaid
interest will be converted into Common Stock and Warrants as follows:


 


i.      AXCESS upon the execution of
this Agreement shall issue and deliver to VennWorks 1,831,332 shares of the
Common Stock, and


 


ii.   As further consideration for
entering into this Agreement upon the execution of this Agreement AXCESS shall
issue and deliver to VennWorks a warrant to purchase up to 1,831,332 shares of
the Common Stock of AXCESS.  The
exercise price of the warrants will be $2.75 and they will expire on November
30, 2005.


 


2.                                       Securities
Act Legend; Registration Rights. 
The Securities issued in connection with this agreement  (hereinafter collectively, the “Shares”)
will not be registered under the Securities Act of 1933, as amended (the
“Securities Act”).  Certificates
representing the Shares shall bear a restrictive legend substantially to the
effect of the following:


 


THE SECURITIES REPRESENTED
HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, OR


 

















 


APPLICABLE STATE
SECURITIES LAWS, OR THE SECURITIES LAWS OF ANY OTHER JUSRISDICTION.  THEY MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENSE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THOSE SECURITIES LAWS OR
PURSUANT TO AN EXEMPTION THEREFROM. 
ADDITIONAL RESTRICTIONS REGARDING THE TERMS UNDER WHICH THE SHARES
REPRESENTED BY THIS CERTIFICATE MAY BE CONVERTED INTO VOTING OR NON-VOTING
COMMON STOCK OF THE COMPANY, AS THE CASE MAY BE, ARE SET FORTH IN THE
RESPECTIVE CERTIFICATES OF DESIGNATIONS, PREFERENCES, POWERS AND RIGHTS FOR THE
SHARES.


 


3.                                       Representations
and Warranties by AXCESS.  AXCESS
hereby represents and warrants to VennWorks as follows:


 


a.               AXCESS
is a corporation duly organized, validly existing and in good standing under
the laws of the state of Delaware, and has the corporate power and authority to
execute and deliver this agreement, to issue the Shares on the basis described
herein and otherwise to perform its obligations under this agreement.


 


b.              The
execution and delivery by the AXCESS of this letter agreement, the issuance of
the Shares, and the performance by AXCESS of its obligations hereunder, have
been duly authorized by all requisite corporation action on the part of AXCESS
and will not (a) violate any provision of law, statute, rule or regulation or
any order of any court or other agency of government, (b) conflict with or
violate the Certificate of Incorporation or By-Laws of AXCESS, in each case as
amended, or (c) violate, conflict with or constitute (with due notice or lapse
of time or both) a default under any indenture, mortgage, lease, license,
agreement or other contract or instrument or result in the creation or
imposition of any lien, charge or encumbrance of any nature upon the properties
or assets of AXCESS or any of its subsidiaries, in each case if such violation,
conflict, default, lien, charge or encumbrance would have a material adverse
effect on AXCESS.


 


c.               This
letter has been duly executed and delivered by AXCESS and constitutes the valid
and legally binding obligation of AXCESS, enforceable in accordance with its
terms, except to the extent the enforceability hereof may be limited by
applicable bankruptcy, moratorium or similar laws affecting the rights of
creditors generally.


 


d.              Based
in part upon the representations and warranties of VennWorks by, any federal,
state or other governmental department, commission, board, bureau, agency, or
instrumentality or any third party is or will be necessary for the


 


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execution and delivery of
this agreement by AXCESS and the issuance of the Shares hereunder, other that
the filing of a notice of sale on Form D with the Securities and Exchange
Commission in accordance with the rules and regulations thereof under the
Securities Act


 


e.               The
Shares are duly authorized, validly issued, fully paid and non-assessable
shares of Common Stock and are not subject to any preemptive rights.


 


4.                                       Representations
and Warranties by VennWorks. 
VennWorks hereby represents and warrants to AXCESS as follows:


 


a.               VennWorks
is acquiring the Shares for its own account, for investment and not with a view
to the distribution thereof within the meaning of the Securities Act.


 


b.              VennWorks
understands that the Shares have not been registered under the Securities Act,
by reason of their issuance by AXCESS in transactions exempt from the
registration requirements of the Securities Act, and that the Shares must be
held by VennWorks indefinitely unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration


 


c.               VennWorks
further understands that the exemption from registration afforded by Rule 144
(the provisions of which are known to it) promulgated under the Securities Act
depends on the satisfaction of various conditions, and that, if applicable,
Rule 144 may afford the basis for sales only in limited amounts, after
compliance with the holding periods and other provisions thereof.


 


d.              VennWorks
understands that its investment hereunder involves substantial risks and
represents and warrants that it has made such independent examinations and
investigations of AXCESS as it has deemed necessary in making its investment
decision, and VennWorks further represents and warrants that it has had
sufficient access to the officers, directors, books and records of AXCESS as it
has deemed necessary to conduct such examination and investigation and make
such investment decision


e.               VennWorks
is able to bear the economic risk of the investment contemplated by this
agreement and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of the investment
contemplated by this agreement


 


5.                                       Miscellaneous.


 


a.               This
letter agreement constitutes our entire agreement with respect to the subject
matter hereof.  This letter agreement
may not be modified or amended


 


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of any provision hereof
waived except by an instrument in writing signed by AXCESS and VennWorks.


 


b.              This
letter agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and permitted assigns.  The rights of Amhion hereunder shall be
assignable to any other holder of the Shares. 
Except as provided in the immediately preceding sentence, this agreement
and the rights of Amhion hereunder shall not be assignable, and any purported
assignment hereof or thereof shall be void


 


c.               This
letter agreement may be executed in any number of counterparts and on separate
counterparts, each of which shall be an original instrument, but all of which
together shall constitute a single agreement. 
One or more signature pages from any counterpart of this letter agreement
may be attached to any other counterpart of this letter agreement without in
any way changing the effect thereof. 
This letter agreement shall be effective when executed and delivered by
AXCESS and Amhion.


 


d.              All
notices, requests, demands, consents, waivers, or other communications made
hereunder to any party or holder of Shares shall be in writing and shall be
deemed to have been duly given if delivered personally or sent by
nationally-recognized overnight courier, facsimile or by first class registered
or certified mail, return receipt requested, postage prepaid, addressed to such
party at the address set forth below:


 


	
  AXCESS:

  	
  3208 Commander Drive

  
	
   

  	
  Carrollton, Texas 75093

  
	
   

  	
  Attention: 
  Chief Financial Officer

  
	
   

  	
  Facsimile No.: 
  972-407-9085

  
	
   

  	
   

  
	
  With a Copy to:

  	
  Craig G. Ongley

  
	
   

  	
  Vial, Hamilton, Koch & Knox, LLP

  
	
   

  	
  1700 Pacific Avenue, Suite 2800

  
	
   

  	
  Dallas, Texas 75201

  



 


or to such other address as the party to whom such
communication is to be given may have furnished to the other party in writing
in accordance herewith.  All such
notices, requests, demands, consents, waivers or other communications shall be
deemed to have been delivered (a) in the case of personal delivery, on the date
of delivery, (b) if sent by facsimile, on the date sender receives a
confirmation receipt, (c) if sent by overnight courier, on the next business
day following the date sent and (d) in the case of mailing, on the third
business day following such mailing


 


e.               Entire
Agreement.  This Agreement sets
forth the entire agreement of the parties hereto with respect to the subject
matter hereof.


 


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f.                 Governing
Law.  This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Delaware.


 


 


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REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


 


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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.


 


	
   

  	
  AXCESS
  INTERNATIONAL, INC.,

  a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Allan Frank

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Allan Frank

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  VP & CFO

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  VENNWORKS
  LLC

  a Delaware limited liability corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert J. Bertoldi

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Robert J. Bertoldi

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
  President

  	
   

  



 


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